Tim Boersma writes:  Policies on trade and competition have become a new field of international conflict and the European Commission (EC) has shown its willingness to use them as a weapon. Yesterday, the EC sent a Statement of Objections to Russian state-owned gas company Gazprom for its alleged abuse of market power in Central and Eastern European gas markets. It is the next step in an antitrust case that was first opened in August 2012. In an initial response, Gazprom states that the claims of the EC are unsubstantiated. Of course, in the current political climate it is difficult to see this as a regular antitrust case, but that is exactly how it should be assessed.

The case:

• Gazprom might be hindering cross-border gas sales, by imposing export ban clauses, destination clauses (stipulating that natural gas can only be consumed in a certain country, or sold to a limited number of customers within that country), or requiring wholesalers to obtain Gazprom’s approval for exports. According to the EC, Gazprom has included territorial restrictions in its supply agreements with eight EU member states: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Slovakia. Territorial restrictions on gas sales are anticompetitive, as for example ruled by the EC in 2009 when it fined France’s EDF and Germany’s E.ON for making agreements not to sell gas from the MEGAL pipeline in each other’s markets.
• Gazprom allegedly has an unfair pricing policy. The EC is investigating whether the prices that wholesalers and industrial customers pay are unfair, and how Gazprom’s price formulae—which are based on oil price indexes—have contributed to the unfairness. The EC has preliminarily concluded that Gazprom has charged unfair prices in five EU member states, Bulgaria, Estonia, Latvia, Lithuania, and Poland.
• Concerns on gas transport infrastructure. According to the EC, Gazprom leveraged its market dominance in Bulgaria and Poland by making gas supplies conditional upon obtaining certain infrastructure commitments from wholesalers. In Bulgaria, for instance, this iinvolved the South Stream pipeline, which Gazprom cancelled in December 2014.  EU and Gazprom